Trade and Commerce at U.S. Ports of Entry
Senate Committee on Commerce Subcommittee on International Trade, Customs and Global Competititveness
Chairman Cornyn, Ranking Member Casey, distinguished members of the Subcommittee, thank you for the opportunity to provide this testimony on “Trade and Commerce at U.S. Ports of Entry.” As President of the National Treasury Employees Union (NTEU), I have the honor of leading a union that represents over 25,000 Customs and Border Protection (CBP) Officers, Agriculture Specialists (CBPAS) and trade compliance and enforcement personnel stationed at 328 land, sea and air ports of entry across the United States (U.S.) and 16 Preclearance stations currently in Ireland, the Caribbean, Canada and United Arab Emirates airports.
CBP’s Office of Field Operations (OFO) is the largest component of CBP responsible for border security –including anti-terrorism, immigration, anti-smuggling, trade compliance, and agriculture protection—while simultaneously facilitating lawful trade and travel at U.S. ports of entry that are critical to our Nation’s economy.
In addition to CBP’s trade and travel security, processing and facilitation mission, CBP OFO employees at the ports of entry are the second largest source of revenue collection for the U.S. government. In 2016, CBP processed more than $2.2 trillion in imports and collected more than $44 billion in duties, taxes, and other fees. Customs and Border Protection Entry Specialists, Import Specialists, Paralegal Specialists who determine fines, penalties and forfeitures, Customs Auditors and Attorneys and other trade compliance personnel are the frontline in the defense against illegal imports and contraband. These employees enforce over 400 U.S. trade and tariff laws and regulations in order to ensure a fair and competitive trade environment pursuant to existing international agreements and treaties, as well as stemming the flow of illegal imports, such as pirated intellectual property and counterfeit goods, and contraband such as child pornography, illegal arms, weapons of mass destruction and laundered money. CBP is also a revenue collection agency. According to CBP’s most recent data, CBP OFO employees processed more than $2.4 trillion in trade goods and collected more than $46 billion in revenue.
Along with facilitating legitimate trade and enforcing trade and security laws, CBP trade personnel are responsible for stopping illegal transshipments; goods with falsified country of origin; goods that are misclassified; and collecting antidumping and countervailing duties.
Today, the greatest challenge hindering trade and commerce at U.S. port of entry is that CBP OFO is chronically understaffed and the economic cost of the CBP OFO staffing shortage is staggering. According to the Joint Economic Committee (JEC), every day 1.1 million people and $5.9 billion in goods legally enter and exit through the ports of entry. The volume of commerce crossing our borders has more than tripled in the past 25 years. Long wait times lead to delays and travel time uncertainty, which can increase supply chain and transportation costs. According to the Department of Commerce, border delays result in losses to output, wages, jobs and tax revenue due to decreases in spending by companies, suppliers and consumers. JEC research finds border delays cost the U.S. economy between $90 million and $5.8 billion each year.
CBP OFO has a current need to hire 2,516 additional CBP Officers and 721 Agriculture Specialists to achieve the staffing target as stipulated in CBP’s attached FY 2018 Workload Staff Model (WSM) and Agriculture Resource Allocation Model (AgRAM). According to CBP’s Congressional Affairs Office, as of May 4, 2018, CBP OFO has 23,147 CBP Officers onboard at the ports of entry—1,328 short of the authorized staffing level of 24,475.
Understaffed ports lead to long delays in travel and cargo lanes and also create significant hardship and safety issues for frontline employees. Involuntary overtime and involuntary work assignments far from home disrupt CBP Officers’ family life and destroy morale.
Trade and travel volume continue to increase every year, but CBP OFO staffing is not keeping pace with this increase. New and expanded federal inspection facilities are being built at the air, sea and land ports, yet CBP OFO staffing is not expanding.
The state of Texas has 29 ports of entry including some of the nation’s largest airports, seaports and land ports in the country, as well as two CBP trade operations Centers of Excellence and Expertise (CEE)—the Machinery CEE in Laredo and the Petroleum, Natural Gas and Minerals CEE in Houston. NTEU represents approximately 4,900 frontline CBP employees in Texas.
All Texas ports are experiencing CBP staffing shortages with Laredo leading the pack. According to CBP, as of April Laredo land port has a staffing shortage of over 90 CBP Officers. At Eagle Pass port of entry, the shortage is around 35 and at Del Rio about 15.
Pennsylvania also have major air and sea ports of entry in Philadelphia. According to NTEU members there, the Philadelphia International Airport is short approximately 8 to 10 CBP Officer positions.
We commend Senator Cornyn for sponsoring legislation that includes a provision to authorize the funding and hiring of additional CBP employees at the ports of entry. NTEU strongly supports legislation recently introduced by Finance Committee member Senator McCaskill (D-MO), S. 2314, the Border and Port Security Act. S. 2314 is stand-alone legislation that would authorize the hiring of 500 additional CBP Officers and additional OFO trade operations staff annually until the staffing gaps in CBP’s various Workload Staffing Models are met
CBP employees also perform critically important agriculture inspections to prevent the entry of animal and plant pests or diseases at ports of entry. For years, NTEU has championed the CBP Agriculture Specialists’ Agriculture Quality Inspection (AQI) mission within the agency and has fought for increased staffing to fulfill that mission. The U.S. agriculture sector is a crucial component of the American economy generating over $1 trillion in annual economic activity. According to the U.S. Department of Agriculture, foreign pests and diseases cost the American economy tens of billions of dollars annually.
At many ports, including the port of Brownsville, there are not enough Agriculture Specialists to staff all shifts and CBP Officers are backfilling for Agriculture Specialists despite a December 10, 2007 directive that states “Directors, Field Operations must ensure that CBPAS are assigned to agricultural inspectional activities at the individual ports of entry. It is imperative that assignments for these employees are dedicated to the mission of protecting the nation’s food supply and agricultural industry from pests and diseases absent exigent operational circumstances.”
CBP’s AgRAM shows a need for an additional 721 frontline CBP Agriculture Specialists and supervisors to address current workloads through FY 2018; however, even with the 2016 increase in AQI user fees, CBP proposed to fund 2,418 CBP Agriculture Specialist positions in FY 2018, not the 3,149 called for by the AgRAM.
Despite CBP’s release of its risk-based AgRAM that documents an ongoing shortage of CBP Agriculture Specialists--by 721--at the ports of entry, the budget request includes no direct appropriation to hire these critical positions needed to fulfill CBP’s AQI mission of pest exclusion and safeguarding U.S. agriculture and natural resources from the risks associated with the entry, establishment or spread of animal, plant pests and pathogens. NTEU urges the Committee to support a direct appropriation to begin to hire the 721 Agriculture Specialists as stipulated in their FY 2018 AgRAM.
Customs User Fees
CBP collects Customs User Fees (CUFs) which include CUFs authorized by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to recover certain costs incurred for processing, among other things, air and sea passengers, and various private and commercial land, sea, air, and rail carriers and shipments. The source of these user fees are commercial vessels, commercial vehicles, rail cars, private aircraft, private vessels, air passengers, sea passengers, cruise vessel passengers, dutiable mail, customs brokers and barge/bulk carriers.
COBRA fees are deposited into the Customs User Fee Account and are designated by statute to pay for services provided to the user, such as 100% of inspectional overtime for passenger and commercial vehicle inspection during overtime shift hours. Of the 24,147 CBP Officers currently funded, COBRA user fees and COBRA FTA fund 3,825 full-time equivalent (FTEs) CBP Officers. Further, Immigration Inspection User Fees (IUF) fund 4,179 CBPO FTEs. User fees under the Senate Finance Committee jurisdiction fund 8,004 CBPO FTEs or one third of the entire CBP workforce at the ports of entry.
For every $10 million in CUFs collected, CBP funds 92 CBP Officer FTEs. The Administration has proposed, starting with FY 2015 and through its FY 2019 budget request, an increase of at least $2 in CUFs and $2 in IUFs. If enacted, a $2 increase in both the CUFs and IUFs would support the hiring and support of 1,800 new CBP Officers per fiscal year.
Diversion of Customs User Fees
NTEU strongly opposes the diversion of Customs User fees. Any increases to the CUF Account should be properly used for much-needed CBP staffing and not diverted to unrelated projects.
Unfortunately, under Section 52202 of the FAST ACT, Congress indexed CUFs to inflation, but diverted this funding from the Customs User Fees Account to the General Fund to pay for unrelated infrastructure projects. Indexing COBRA user fees to inflation would have raised $1.4 billion over ten years—a potential $140 million per year funding stream to help pay for the hiring of additional CBP Officers to perform CBP’s border security, law enforcement and trade and travel facilitation missions.
Hijacking the indexed portion of the CUFs to inflation and using these fees as a FAST ACT pay-for has cost CBP Customs user fee funding to hire over 900 new CBP Officers since the FAST Act went into effect. These new hires would have significantly alleviated the current CBP Officer staffing shortage.
FY 2019 CBP Budget Request
The President’s FY 2019 budget request does support the hiring of new CBP Officers to meet the current staffing need of 2,516, but seeks to fund these new positions by increasing user fees. The President’s budget proposal only provides appropriated funding to hire 60 new CBP Officer positions at the National Targeting Center. The President’s request seeks no appropriated funding to address the current CBP Officer staffing shortage of 2,516 additional CBP Officers as stipulated by CBP’s own FY 2018 WSM or to fund the additional 721 CBP Agriculture Specialists as stipulated by CBP’s own FY 2108 AgRAM.
As in the past, the Administration’s budget proposes significant realignment of user fees collected by CBP. Currently, 33 percent of a CBP Officer’s compensation is funded with a combination of user fees, reimbursable service agreements, and trust funds. The FY 2019 budget proposes to reduce OFO appropriated funding by realigning and redirecting user fees, including redirecting the Electronic System for Travel Authorization (ESTA) fee that would require a statutory change. The FY 2019 budget proposal would redirect approximately $160 million in ESTA fees from Brand USA to CBP. Rather than redirecting the ESTA fees to fund the additional 2,516 CBP Officer new hires needed to fully staff CBP Officer positions in FY 2019 and beyond, as stipulated by CBP’s WSM, the budget would in fact reduce CBP’s appropriated funding by $160 million. Therefore, while the budget proposes to increase the number of CBP Officer positions funded by ESTA user fees by 1,093, it decreases appropriated funding by $160 million, and reduces the number of CBP Officer positions funded by appropriations by 1,093 positions.
Once again, the President’s FY 2019 budget includes CBP Officer staffing numbers that are dependent on Congress first enacting changes to statutes that determine the amounts and disbursement of these user fee collections. To accomplish the ESTA fee change in the President’s budget, Congress must amend the Travel Promotion Act of 2009 (P.L. 111–145). The President’s request also proposes fee increases to the Immigration and Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) user fees, not a direct up-front appropriation, to fund CBP Officer new hires as stipulated by the WSM. However, Immigration and COBRA user fees cannot be increased without Congress first enacting legislation. A proposal to increase user fees has been part of the Administration’s annual budget submission since FY 2014 to fund the hiring of new CBP Officers. These user fee increase proposals are again in the FY 2019 budget request, but it is NTEU’s understanding that the Senate Finance Committee is not currently planning to act on this long-standing CBP legislative proposal.
Therefore, to address CBP OFO staffing shortages and to address the ever-increasing volume of trade through the ports of entry in the future, NTEU strongly supports S. 2314, the standalone CBP Officer staffing authorization bill and urges Senators to cosponsor and advance this bill.
NTEU is seeking up to $100 million in Fiscal Year (FY) 2019 direct appropriations for the hiring of 500 CBP Officers, 100 CBP Agriculture Specialists, and additional needed non-uniformed Trade Operations and support staff. NTEU commends the Senate Appropriations Committee for approving a bill for floor action that provides an additional $49 million above the FY 2019 Budget request to add 375 CBP Officers.
CBP Officer Overtime
Also due to the ongoing current staffing shortage at the ports, CBP Officers nationwide are working excessive overtime to maintain basic port staffing. Currently, CBP Officer overtime pay is funded 100% through the COBRA user fee and is statutorily capped at $45,000 per year. All CBP Officers are aware that overtime assignments are an aspect of their jobs. However, long periods of overtime hours can severely disrupt an officer’s family life, morale and ultimately their job performance protecting our nation.
Because of the ongoing staffing shortages, CBP Officers can be required to regularly work overtime which results in individual Officers hitting the overtime cap very early in the fiscal year. This leaves no overtime funding available for peak season travel, holidays and other times when CBP Officers are expected to work overtime resulting in critical staffing shortages in the third and fourth quarter of the fiscal year that usually coincide with peak travel at the ports.
At many ports, CBP has granted overtime exemptions to over one half of the workforce to allow managers to assign overtime to Officers that have already reached the statutory overtime cap, but cap waivers only force CBP Officers already working long daily shifts to continue working these shifts for more days. Officers are required to come in hours before their regular shifts, to stay an indeterminate number of hours after their shifts (on the same day) and are compelled to come in for more overtime hours on their regular days off as well. Both involuntary overtime--resulting in 12 to 16 hour shifts, day after day, for months on end--and involuntary work assignments far from home significantly disrupt CBP Officers’ family life, erode morale and are not a solution for staffing shortages at the ports.
Temporary Duty Assignments at Southwest Land Ports of Entry
Due to CBP’s ongoing staffing shortage, since 2015, CBP has been diverting CBP Officers from other air, sea and land ports to severely short-staffed Southwest land ports for 90-day temporary duty assignments (TDYs). Since November 1, 2015 between 80 and 200 CBP Officers per quarter have been TDYed to the San Diego and Tucson land ports. Owing to the failure to fill CBP Officer positions, neither the San Ysidro nor Nogales land ports can safely function without these TDYs.
The continuing lack of CBP Officer staffing at these ports of entry results in forced overtime shifts, multiple deployments away from home, and low morale. Phase 4 of TDYs began June 24, 2018 with 100 CBP Officers being sent from other short-staffed ports to the critically short-staffed ports of Nogales and San Ysidro for 90-day temporary duty assignments.
Reimbursable Service Agreements
In recent years, in order to find alternative sources of funding to address serious CBP Officer and Agriculture Specialist staffing shortages, CBP received authorization for and has entered into Reimbursable Service Agreements (RSAs) with the private sector as well as with state and local governmental entities. These stakeholders reimburse CBP for additional inspection services including overtime pay and the hiring of new CBP Officer and Agriculture Specialist personnel that in the past have been paid for entirely by user fees or appropriated funding. According to CBP, since the program began in 2013, CBP has entered into agreements with 36 stakeholders, providing more than 106,000 additional processing hours for incoming commercial and cargo traffic.
NTEU believes that the RSA program would be entirely unnecessary if Congress, when it authorized CBP user fees collected to be indexed to inflation, had provided that the $140 million a year funding stream be used to increase CBP overtime, staffing and other resources, rather than fund highway and other infrastructure projects authorized by the 2016 highway bill. NTEU also believes that the RSA program is a band aid approach and cannot replace the need for Congress to either appropriate new funding or authorize an increase in customs and immigration user fees to adequately address CBP staffing needs at the ports.
RSAs simply cannot replace CBP appropriated or user fee funding--making CBP a “pay to play” agency. NTEU also remains concerned with CBP’s new Preclearance expansion program that also relies heavily on “pay to play.” Further, NTEU believes that the use of RSAs to fund CBP staffing shortages raises significant equity issues between larger and/or wealthier ports and smaller ports, which calls for an engaged Congress conducting active oversight.
CBP OFO is the premier DHS component tasked with stemming the nation’s opioid epidemic--a crisis that is getting worse. In a report released on May 10, 2019, by the Senate Homeland Security and Governmental Affairs Committee Minority titled “Combatting the Opioid Epidemic: Intercepting Illicit Opioids at Ports of Entry”, CBP Officers at the ports of entry were found to “play a key role in stopping opioids and that CBP has significant shortages of Port Officers that may be compromising efforts to seize additional opioids before they can reach U.S. communities.”
The smuggling of fentanyl and other opioids has increased markedly. According to the report, “between 2013 and 2017, approximately 25,405 pounds, or 88% of all opioids seized by CBP, were seized at ports of entry. The amount of fentanyl seized at the ports of entry increased by 159% from 459 pounds in 2016 to 1,189 pounds in 2017.”
The scourge of synthetic opioid addiction is felt in every state and is a threat to the nation’s economic security and well-being. The majority of fentanyl is manufactured in other countries such as China, and is smuggled primarily through the ports of entry along the southwest border and through international mail and express consignment carrier facilities (e.g. FedEx and UPS). CBP Officers are, “in the majority of cases, the last line of defense in preventing illicit opioids from entering the United States…CBP’s current shortage of over 4,000 Port Officers is directly influencing operations and staffing these positions could increase CBP’s ability to interdict opioids.”
According to CBP, over the last three years, there were 181 CBP employees assigned to the five Postal Service International Service Centers and 208 CBP employees assigned to the Private Express Carrier Facilities.
On average, CBP Officers only inspect 100 of the 1.3 million inbound international packages that arrive daily by international mail. In 2016, 65 million packages arrive via express carriers, which are required by law to provide advanced electronic data. However, this data can be incomplete. The Committee report found, “for example, from 2014 and 2016, CBP issued over five thousand penalties for incomplete manifest information and assessed over $26 million in fines. However, express shippers successfully negotiated penalties down to just over $4 million.”
In the past year, the FedEx hub in Memphis processed 38 million imports and 48 million exports--equaling 86 million in total package volume. There are approximately 24 CBP Officers in total screening all 86 million shipments, and on average, about 15 CBP Officers are working the main overnight FedEx “sort” shift. Considering the volume at the FedEx hub, NTEU has been told that the port requires a minimum of 60 CBP Officers to facilitate the flow of legitimate freight and ensure successful interdiction of these synthetic chemicals. NTEU’s CBP OFO appropriation request supports both the critical need at the air, sea and land ports of entry, but also at international postal and express consignment hubs.
Also, under the Trade Act of 2002 as amended, Congress required all cargo, including express cargo, but not including inbound international mail, subject to requirements for electronic advance data (EAD). For cargo arriving by aircraft, express consignment operators are required to provide EAD to CBP prior to the scheduled arrival of express cargo in the U.S. Express consignment operators accept items for delivery to the U.S. at points of sale in foreign countries and maintain control of items until they are delivered to the addressees.
GAO reports that express consignment operators say that “they are able to individually scan each item upon arrival, providing an opportunity to identify and set aside express cargo targeted for CBP inspection based on EAD.” (GAO-17-606, page 29) However, CBP Officers tell NTEU that this is not the case for “overages” that arrive unmanifested or for mislabeled packages. They also tell us that too many people rely on electronic manifests to be accurate when they frequently are not.
According to GAO, “although CBP has been using EAD to target express cargo for inspection since approximately 2004, it has not evaluated whether this method results in benefits relative to other methods of choosing express cargo…for inspection” (GAO-17-606, page 28.)
For these reasons, NTEU commends Senator Portman (R-OH) for including language in section 8 of S. 3057, the STOP Act, requiring CBP to provide a report on an annual basis on the individuals and companies that violate the Trade Act to the Senate Committee on Finance, among others. Congress, by requiring CBP to annually report this useful information on violators and violator penalty assessments, would enhance CBP’s interdiction of prohibited items from entering the U.S. through express consignment operators.
Lastly, the nation’s busiest land port of entry San Diego, along with the Tucson area land ports, account for “57% of all opioids seized by ports of entry, including 75% of all fentanyl and 61% of all heroin seized.” These two land ports are also the most critically understaffed. According to CBP, “these long-term staffing shortfalls continue to stretch the limits of operational, enforcement and training capabilities at the San Diego and Tucson ports of entry.”
Non-uniformed Trade Enforcement and Compliance Staffing
When CBP was created in 2003, it was given a dual mission of not only safeguarding our nation’s borders and ports from terrorist attacks, but also the mission of regulating and facilitating international trade. CBP is responsible for collecting import duties and ensuring importers fully comply with all applicable laws, regulations, quotas, Free Trade Agreement (FTA) requirements, and intellectual property provisions.
Customs revenues are the second largest source of federal revenues collected by the U.S. Government after tax revenues, and this revenue funds other federal priority programs. NTEU is deeply concerned with the lack of resources, both in terms of dollars and manpower, being devoted to CBP’s trade functions. Lack of sufficient focus and resources not only cost the U.S. Treasury in terms of customs duties and revenue loss, but also cost American companies in terms of lost business to unlawful imports.
As of February 2018, there are 2,496 CBP revenue occupation personnel onboard, 272 positions short of the CBP revenue staff authorized by Congress. These occupations include Import (883), Entry (389), Drawback (34), Fines, Penalties and Forfeiture (271), National Import (84) and International Trade Specialists (155), Customs Auditors (308), and Attorneys (112).
The Senate Finance Committee has primary jurisdiction over CBP’s trade and commercial operations mission. Since CBP was established in March 2003, however, there has been no increase in non-uniformed CBP trade enforcement and compliance personnel even though inbound trade volume grew by more than 24 percent between FY 2010 and FY 2014. Additionally, CBP trade operations staffing has fallen below the statutory floor set forth in the Homeland Security Act of 2002 and stipulated in the FY 2017 CBP Resource Optimization Model for Trade Positions.
Also, continuing staffing shortages, inequitable compensation, and lack of mission focus, are the main reasons why experienced CBP commercial operations professionals at all levels, who long have made the system work, are leaving or have left the agency. Further, twenty-five percent of CBP Import Specialists will retire or be eligible to retire within the next few years. For these reasons, NTEU strongly supported CBP’s FY 2018 direct appropriations request to hire 140 additional positions at the CBP Office of Trade to support implementation of Trade Enhancement and Facilitation Act (P.L. 114-125) requirements.
Increasing CBP OFO staffing at the ports of entry is an economic driver for the U.S. economy. According to JEC, “every day 1.1 million people and $5.9 billion in goods legally enter and exit through the ports of entry,” but border delays cost the U.S. economy upwards of $5 billion each year. CBP estimates that the annual hiring of an additional 500 CBP Officers at the ports of entry would increase yearly economic activity by $1 billion and result in an additional 16,600 jobs per year to the U.S. economy.
Thank you for the opportunity to submit this statement on the CBP OFO resources needed to secure and protect trade and commerce at U.S. ports of entry on behalf of the men and women represented by NTEU at the nation’s ports of entry.